U.S stock futures edged higher on Wednesday as investors await U.S crude inventory data to get a clear evaluation on the future of oil prices, which have been on a decline due to a growing glut. Several major stocks are making headlines today after the release of their latest quarterly earnings reports, including Marvell Technology Group Ltd. (NASDAQ:MRVL), Microsoft Corporation (NASDAQ:MSFT), Navient Corp (NASDAQ:NAVI) and United Continental Holdings Inc (NYSE:UAL). Let’s dig into the results released by these five companies and analyze what the hedge funds tracked by Insider Monkey think of them.
Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 765 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (read more details here).
Marvell Beats Earnings Estimates
Marvell Technology Group Ltd. (NASDAQ:MRVL) has surged by 11.47% after the company reported fourth quarter of fiscal year 2016 earnings of $0.11 per share, beating the estimates of $0.09. However, revenue for the quarter came in at $616.2 million, far below the consensus estimate of $652.65 million. Analysts think that several factors are denting the chipmaker’s financial performance, including Carnegie Mellon University’s lawsuit, which cost the company $750 million, as well as its decision to end its mobile devices business. Nonetheless, investors were very pleased by the its latest quarterly results. A total of 31 hedge funds in our database were long Marvell Technology at the end of the first quarter, up from 25 funds a quarter earlier.
Microsoft Surges After Impressive Results
Microsoft Corporation (NASDAQ:MSFT) is making headlines after posting fiscal year 2016 fourth quarter results that easily topped analysts’ estimates. The company earned $0.69 per share for the quarter, up from estimates $0.58. Revenue for the quarter came in at $22.6 billion, topping the consensus estimate of $22.14 billion. Microsoft’s transition to on-demand computing services and the impactful growth of its Azure Cloud services pushed the financial needle in the quarter. Microsoft’s CEO Satya Nadella said in a statement that the company’s Cloud platform was experiencing “significant” customer momentum and that the company is looking forward to reaching new opportunities in the coming fiscal year. Microsoft’s stock has skyrocketed more than 6% this morning on the results. Microsoft Corporation (NASDAQ:MSFT) was one of the most popular stocks among the funds tracked by Insider Monkey as of March 31. 144 of those hedge funds were bullish on the company, including Jeffrey Ubben’s ValueAct Capital, which held 56.62 million Microsoft shares.
On the next page we’ll examine the earnings reports of Navient Corp and United Continental.
Navient Beats Estimates
Navient Corp (NASDAQ:NAVI) is on investors’ radar today after the company reported second quarter adjusted EPS of $0.47, besting the estimates of $0.44. The Delaware-based student loans company’s revenue came in at $429 million for the period. Net interest income was $408 million, a 9.7% year-over-year dip. Navient’s CEO Jack Remondi said in a statement that loan performance trends continue to outperform expectations, and that the company is “on target” as in enters the second-half of the year. Out of the funds in our database, 27 were bullish on Navient Corp (NASDAQ:NAVI) as of March 31.
United Continental Beats Estimates, Approves Buyback Plan
United Continental Holdings Inc (NYSE:UAL) posted second quarter EPS of $2.61, eclipsing estimates of $2.56. Revenue came in at $9.40 billion for the quarter, down from $9.91 billion revenue for the same period same period of last year, but narrowly topping estimates of $9.38 billion. The airline company’s Board also approved a buyback program of $2 billion of stock. United Continental CEO Oscar Munoz said in a statement that the company has enjoyed the “best six months” of operational performance in its history and that it will continue unlocking its potential in the coming months. At the end of the first quarter, 61 hedge funds in our system held about $3.37 billion worth of positions in United Continental Holdings Inc (NYSE:UAL).